Expanding credit access compliantly with AI

In the latest episode of Leaders in Lending, Upstart’s Chief Compliance Officer, Annie Delgado, had some unconventional advice: “Don’t cut off both ends of the roast.”

The saying relates to a child asking their mother why she always cuts the ends off her roasts. The mother replies, “Well, my mom taught me to do it this way.” The child asks the same question to the grandmother and the grandmother replies, “I don’t know why you do it. I did it because my pan was too small!”

Delgado explained that a lot of the time, the same phenomenon is present in financial services. People tend to do things simply because that is how they’ve been done for a long time, even if those processes can and should evolve for the better. This is what Delgado calls “status quo bias,” and nowhere is this more apparent than in access to credit.

A few years ago, Upstart performed a study that found that 48 percent of Americans have access to prime credit, yet 80 percent have never defaulted on a loan.1 This mismatch means many Americans are shut out from life’s necessities, including education, homeownership, healthcare, and more. Many are charged higher interest rates than they should be, and despite innovations in internet access, smartphones, electric vehicles, and renewable energy, access to credit has remained stagnant since the 90s.


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